Charities, Non-Profits and Educational Institutions
Life settlements also have a profound effect on fundraising
opportunities available to Charities, Non-Profits, and
Educational Institutions. Most of these organizations currently
solicit unneeded life insurance policies as a standard
element of their charitable gifting program. These policies
provide the organizations with a potentially valuable long
term asset and enable donors to benefit from a current
tax deduction for the cash surrender value of the policy
and ongoing deductions for any future premium payments
made on behalf of the charity/institutions.
But what happens when a donor can no longer
afford premium payments?
What if the Institution or Charity cannot afford to maintain
premium payments and the policy is in danger of lapsing?
Or when the Institution or Charity finds it needs cash to
support current programs?
Previously, the options were limited to reallocating
other assets to pay for the life insurance premium payment,
surrendering the policy for the cash value or just
allowing the policy to lapse.
Life settlements now provide an attractive new option!
A Life Settlement can provide cash that
can be applied immediately to today’s needs.
It eliminates costly premiums and annual management and review
of donated policies.
You will also see that it reduces the need to spend down
assets tied to long-term investments.
This in return will provide an opportunity to design new
planned giving campaigns that take advantage of the unique
benefits of life settlements.
New Gifting Opportunities:
Charities and institutions can communicate to potential donors
of unneeded, unaffordable or under performing policies
that a life settlement can create immediate benefits for
both themselves and the institution or charity.
For the Donor:
You will be receiving a settlement for a value greater than
the cash surrender value which in return will increase
the size of the gift and the resulting tax deduction. A life
settlement will allow the donor to see the donation make
a difference - “Giving While Living”. A life settlement
may also enable the donor to use tax savings to purchase
replacement coverage.
For the Institution or Charity:
A life settlement creates a gift of immediate cash that you
will have available for your institution. A life settlement
will eliminate the need for ongoing premium payments and/or
policy management.
 Maryland University Completes Life Settlement on Donated
Policy
George
Washington University Settles Donated Policy Through Chesapeake
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